Background
Plaintiffs, U.S. nationals and heirs of a Cuban property owner, sued British corporations Imperial Brands and WPP under the Helms-Burton Act, alleging they trafficked in confiscated Cuban property. The district court dismissed the claims for lack of personal jurisdiction. The plaintiffs appealed, arguing that the Fifth Amendment permits jurisdiction under Federal Rule of Civil Procedure four comma K two.
The court’s reasoning
The court analyzed the case under the Supreme Court’s decision in Fuld versus Palestine Liberation Organization. The court determined that the Helms-Burton Act does not expressly authorize personal jurisdiction, rendering Rule four comma K one comma C inapplicable. Under Rule four comma K two, the court applied a reasonableness standard derived from the Fifth Amendment. The court found that asserting jurisdiction would be unreasonable because the defendants lacked clear statutory notice, the alleged conduct had no meaningful connection to the United States, and the burden on the British companies would be severe.
What it means going forward
Foreign corporations cannot be sued in U.S. federal courts for Helms-Burton Act violations unless they have clear statutory notice and the exercise of jurisdiction is reasonable under the Fifth Amendment.